The world is watching closely as Australia’s energy market is fundamentally changing, according to Australian Energy Market Operator Managing Director and CEO, Audrey Zibelman.

Speaking in Perth at a CEDA event she said that the rise in renewables, microgrids and smart inverters have led to greater consumer choice, although they are also providing never before seen challenges.

“For those of us in the industry we look at this as not only unprecedented in terms of the scope of the change but extraordinarily challenging in terms of the issues that we’re going to have to deal with,” she said.

“We talk about the integrated grid as being one of the greatest miracles, greatest engineering feats of the twentieth century.

“Now with changes in the system, changes in customer preference, we really are moving into a two-way power system.

“No matter how much people predicted the drop in cost of wind and solar they under-predicted it, the drop in cost was phenomenal in the last decade.

“For the first time we’re seeing a distinction in the fact that we can have economic growth without energy growth both because we’ve reached saturation but also everything’s becoming more efficient, air conditioners, refrigerators, everything’s using less energy.

“The problem for us as an industry is this, we have ageing infrastructure and it has to be replaced.

“We want affordable energy, but we don’t have this increased utilisation rate to be able to replace that.

“How do we make the system as productive as possible, because we don’t want to increase prices, but we do have to replace old systems?”

Ms Zibelman said that the pace of change particularly in Western Australia was phenomenal.

“We used to think in decades, the changes are happening so fast – in fact as I’ve spoken here for three minutes, three more solar panels have been put up on rooves in WA, that’s the change that we’re seeing that we never saw before in this industry,” she said.

“In the last five years we’ve had such an uptake of rooftop solar that in aggregate rooftop solar, 1000 Megawatts is our largest single power plant.

“Who’d have thought that five years ago? In a 4000MW system we have 1000MW of PV on rooves and we’re continuing to grow that at a pace that is really unprecedented.”

Pointing at the changes occurring to the nation’s energy systems, Ms Zibelman said that there were opportunities for consumers to benefit.

“We’re in a fourth industrial revolution and the thing the digital economy will tell you is that when you have more customer choice and more customer advantage, if you’re not thinking about how to drive value to the consumer everyday you’re going to lose them because it’s very easy for them to leave,” she said.

She said that government leadership would be critical for the industry to make the most of the pace of change currently underway, currently one of WA’s strengths.

“We need to act, get things going and adjust as we’re going, so leadership is very critical.

“It’s the states that can provide the leadership...(and) the states are the ones that have to think about how they’re going to go forward.

“That’s the kind of leadership that is going to be essential, where I believe WA has a distinct advantage both because it’s an island and we can be very nimble from an electric perspective but also because it’s separated, we can move very quickly to meet local needs.

“The path we’re on in WA now is really going to help not only WA get through the transition in a way that it is an end solution, but I think it’s a leadership level that the rest of Australia really should be looking at because I think you’re on the right path.”

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